LA Minimum Wage Increase

Lifting L.A. Out of Poverty Requires Much More Than a Minimum Wage Increase…

This week I cast the lone no vote on the proposed $15-an-hour minimum wage increase. My reasons for this vote are not arbitrary and cannot be reduced to simple soundbites. Everyone can agree that there is genuine poverty in the City of Los Angeles, but the solution requires a studied, multi-pronged effort to remedy. There is no minimum wage increase that can be high enough to stem the tide of job loss or reduced working hours that will result from a remedy that puts the complete burden on the backs of business.

Bloomberg referred to the Council’s minimum wage vote as “L.A.’s Minimum Wage Experiment.” Having been both a business owner and a low-wage service worker, I have firsthand experience with the struggles that business owners face every day. Income inequality is not solved by making businesses uncompetitive – especially those that have a low profit margin, and are mobile. Los Angeles is bordered by many cities without a $15 minimum wage and this competitive disadvantage doesn’t support job creation. Worse, it may hurt the very people it is designed to help, as businesses may be forced to reduce hours or staff just to comply with the new policy.

The wage increase also doesn’t guarantee that the increased buying power purported by the proponents actually benefits the City of Los Angeles. Beacon economics reported that “less than one in four dollars paid out by Los Angeles City Businesses and consumers through this plan will actually benefit the workers who are targeted.” The high cost of living in Los Angeles offsets any increase due to the lack of availability of affordable housing.

The average apartment rental in the City is north of $2,000 a month –and according to affordable housing advocates requires a salary of $33 an hour to afford if you’re spending just 30% of your paycheck on housing. The creation of housing to support the workforce is essential because businesses can’t locate here and create jobs if their employees can’t afford to live nearby.

Unfortunately, minimum wage increases by themselves do nothing to expand the middle class. In order to do this we need to create an educated workforce – bringing back trade training and shop classes in our high schools and encouraging a clear and affordable pathway from two-year colleges to universities.

The solutions to poverty in Los Angeles require all sectors – public, private and non-profit to have skin in the game in order to benefit everyone. I voted no on the increase because the cost-benefit analysis shows that the disproportionate burden to business is not balanced by a guaranteed benefit to the impoverished, or to the local economy.– Mitchell Englander, Councilmember Twelfth District